Correlation Between Core Laboratories and RPC

Can any of the company-specific risk be diversified away by investing in both Core Laboratories and RPC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Core Laboratories and RPC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core Laboratories NV and RPC Inc, you can compare the effects of market volatilities on Core Laboratories and RPC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Core Laboratories with a short position of RPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Laboratories and RPC.

Diversification Opportunities for Core Laboratories and RPC

0.85

Correlation Coefficient

Core Laboratories  RPC

Very poor diversification

The 3 months correlation between Core and RPC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Core Laboratories NV and RPC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPC Inc and Core Laboratories is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Core Laboratories NV are associated (or correlated) with RPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPC Inc has no effect on the direction of Core Laboratories i.e., Core Laboratories and RPC go up and down completely randomly.

Pair Corralation between Core Laboratories and RPC

Considering the 90-day investment horizon Core Laboratories NV is expected to generate 1.29 times more return on investment than RPC. However, Core Laboratories is 1.29 times more volatile than RPC Inc. It trades about 0.07 of its potential returns per unit of risk. RPC Inc is currently generating about -0.01 per unit of risk. If you would invest  1,185  in Core Laboratories NV on April 25, 2025 and sell it today you would earn a total of  151.00  from holding Core Laboratories NV or generate 12.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Core Laboratories NV  vs.  RPC Inc

Core Laboratories

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Core Laboratories NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Core Laboratories sustained solid returns over the last few months and may actually be approaching a breakup point.

RPC Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days RPC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, RPC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Core Laboratories and RPC

The main advantage of trading using opposite Core Laboratories and RPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Laboratories position performs unexpectedly, RPC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RPC will offset losses from the drop in RPC's long position.

The idea behind Core Laboratories NV and RPC Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.